BEAUTIFUL BRANDS INTERNATIONAL (BBI): Behind the Hype

Beautiful BrandsBEAUTIFUL BRANDS INTERNATIONAL (BBI): Behind the Hype

Beautiful Brands International (BBI) is portrayed as a modern-day franchise success story in the business and restaurant industry press.

(UnhappyFranchisee.Com) David Rutkauskas, BBI’s founder & CEO, proudly touts his Entrepreneur of the Year award, his “Top 100 People” designation & his claim of 500,000+ Twitter followers, and his 2013  Mercedes-Benz SL550 (base price: $101K)*.

BBI is a virtual press release factory, promoting a constant stream of exciting announcements about the signing of their latest franchise brand, their latest multi-unit franchise development deal, or their newest international master franchisees.

Since UnhappyFranchisee.Com began taking a closer look at the BBI success story, we’ve come to the conclusion that Beautiful Brands’ success is mainly in selling franchises that will never open.

In the past few years, the press has referenced more than 2000 franchises “in development” for BBI-owned brands Camille’s Sidewalk Café (1000+), FreshBerry Frozen Yogurt (1000+), Rex’s Chicken (270+) and Coney Beach (14), yet their current websites collectively list only 74 open locations.

In recent years, BBI has announced the signing of 21 franchise “partner” brands that paid BBI to transform them into national or international franchise chains, yet only 2 appear to have sold and opened franchises.

It appears that more than half of the announced BBI partner brands have terminated their partnerships and separated without having sold a franchise.

One master franchisee is suing David Rutkauskas, Beautiful Brands, and 5 related companies for breach of contract.

Our findings, by brand, are included below.

We have asked David Rutkauskas and BBI for clarification or rebuttal numerous times, but have been ignored. 

If you can help us locate the “success” in the BBI success story, please leave a comment below.

* We’re guessing at the make & model.  We bloggers don’t shop for Mercedes too often.

Beautiful Brands-Owned Franchise Brands

We’ve found evidence that indicates that the vast majority of the franchises sold by BBI never opened, and more than half of those that did open ended up failing.

Angry franchisees have commented “…this company and its leader desire nothing more than to take the money of people they convince their concept is great…

“We had zero support from day one through the last day… Once you are in trouble they stop taking your calls period…”

“Simply put Dave R should be tried and prisoned for the way he treated us and other franchisees.”

Camille’s Sidewalk Café

In 2010 & 2011, Beautiful Brands International (BBI) stories stated that it had more than 1000 Camille’s Sidewalk Café franchises in development.

While Beautiful Brands may have collected fees for more than 1000 franchises, it doesn’t appear that more than about 100 were ever open at one time.

Of those that opened, more than half failed.  According to the SBA, Camille’s has a 58% SBA loan default rate.

Beautiful BrandsAs of January, 2013, there are just 30 Camille’s Sidewalk Café franchises listed on its website.

Several Camille’s ex-franchise owners told UnhappyFranchisee.Com they received little-to-no franchise support and felt David Rutkauskas was indifferent to their struggle for survival:

CAMILLE’S SIDEWALK CAFE Franchise Complaints

Another Camille’s Sidewalk Café Franchise Closes

When the ex-franchise owners shared their experiences on UnhappyFranchisee.Com, they were sent legal threats by BBI’s law firm.

Former Camille’s Franchise Owner Retracts Comment After Legal Threat

More Camille’s Sidewalk Café Franchisees Threatened Over Comments

UnhappyFranchisee.Com Letter to Attorney Robert Sartin, David Rutkauskas

CAMILLE’S SIDEWALK CAFÉ Franchise Closes

FreshBerry

In 2010 & 2011, Beautiful Brands International claimed it had more than 1000 FreshBerry franchises “in development.”

While Beautiful Brands may have collected fees for more than 1000 franchises, it doesn’t appear that more than about 42 were ever open at one time.

As of January, 2013, the number of U.S. FreshBerry stores that have closed (13) is on its way to surpassing the number of U.S. stores open (16).

FRESHBERRY Franchise Closures

BEAUTIFUL BRANDS FreshBerry Smallcakes Franchise Closes

 

Rex’s Chicken

In April, 2010, David Rutkauskas announced the signing of a franchise agreement for the development of 275 Rex’s Chicken franchises in the U.S.

Yet by 2012, there were only 4 Rex’s Chicken locations worldwide.

In January, 2012, the Rex’s Chicken website listed 2 locations… one in Tulsa, OK (in the former Coney Beach space) and one in Raleigh, NC.

When we called the Raleigh Rex’s Chicken, the number was disconnected.  It appears to have closed early 2012, though it’s still listed on the website as open.

Coney Beach

In 2007, David Rutkauskas and Beautiful Brands sold franchises to a hot dog concept called Coney Beach before they had even established an operating prototype.

In July, 2007, they opened the first Coney Beach in Tulsa.  In October, 2007, they announced agreements to expand Coney Beach throughout the Persian Gulf and Florida.

In April, 2010, BBI closed their only Coney Beach and the brand disappeared from BBI’s portfolio.

Read about Coney Beach here:

BEAUTIFUL BRANDS Franchise Complaints

 

Beautiful Brands Franchise Partners

In addition to selling its own franchise brands, BBI also sells a franchise development and sales package which it calls a “partnership” program.

BBI “partners” allegedly pay upfront fees of $50K – $100K, plus a percentage of the fees resulting from franchises sold.

Read our post BEAUTIFUL BRANDS Partner Program: Behind the Hype to see which 2 brands seem to have sold and opened franchises through BBI so far, and the status of the other 19.

BBI appears to “bundle” its partner franchise brands with its own brands in order to sell franchise development rights to international master franchisees.

Abu Dhabi-based EABG allegedly paid BBI $500,000 for master franchising rights in the Middle East.

EABG is suing BBI and David Rutkauskas for breach of contract:  David Rutkauskas, Beautiful Brands Sued by Master Franchisee

Here are our posts on other BBI “partner” brands:

 

CherryBerry Yogurt Bar

CherryBerry Self Serve Yogurt Bar, founded and owned by Dallas & Robyn Jones, seems to be the only partner brand selling and opening a significant number of franchises.  Nevertheless, we suspect that nearly 10% of all CherryBerry stores closed in 2012 which may signal challenging times to come.

Read more about CherryBerry here:

CHERRYBERRY Franchise Closures 2012

Frozen Yogurt Franchise Closure: Pearland, Texas

Franchise Closure: Blue Springs, Missouri

Franchise Closure: Springfield, Missouri

Franchise Closure: Sand Springs, Oklahoma

Franchise Closure: Fayetteville, AR

Texas Franchise Failures

Franchise Closure: Claremore, Oklahoma

Franchise Closes, Cites Poor Sales

NYPD Pizza

One of the newest additions to the BBI partner portfolio has a dubious past and scary track record:

NYPD PIZZA Franchise has a Proven Track Record? Seriously?

 Partner Departures & Bizarre Addition of “Affiliate Brands”

BEAUTIFUL BRANDS Ludger’s Cakes Dumps BBI

BEAUTIFUL BRANDS SmallCakes Cupcakery Breaks Ties with BBI

After the loss of Smallcakes and Ludgers Cakes, the BBI “Portfolio” pages exploded with dozens of logos.  However, many supposed “affiliates have never heard of Beautiful Brands.

DAVID RUTKAUSKAS Bizarre Misrepresentations of Beautiful Brands

BEAUTIFUL BRANDS: THE SOUP KITCHEN Franchise Warning

Beautiful Brands Press Coverage

Three news outlets in particular (Tulsa World, QSR, & Fast Casual) have reinforced and spread the BBI success story myth by publishing BBI-supplied announcements, numbers and quotes for several years.

UnhappyFranchisee.Com has taken them to task for publishing, in our view, BBI press releases as original, fact-checked content, and we’ve urged them to do follow-up stories on the actual outcomes of the celebrated agreements.

Letter to Tulsa World Writer Kyle Arnold

Franchisee Questions for David Rutkauskas

TULSA WORLD: Intentionally Deceptive or Exceedingly Lazy?

BEAUTIFUL BRANDS David Rutkauskas Admits to Franchise Failures

February 19, 2013

BEAUTIFUL BRANDS: UnhappyFranchisee.Com Email to The Journal Record

April 20, 2013

BEAUTIFUL BRANDS: UnhappyFranchisee.Com Letter to The Journal Record

April 22, 2013

BEAUTIFUL BRANDS’ David Rutkauskas Defends BBI’s PR Claims

April 30, 2013

BEAUTIFUL BRANDS: QSR Magazine Pulls BBI Articles

May 3, 2013

 Beautiful Brands Social Media Representations

DAVID RUTKAUSKAS Are His 500,000 Twitter Followers Fakes?

Our opinions regarding David Rutkauskas, Beautiful Brands International (BBI),  and related entities were formed after many hours combing public documents, news stories, Franchise Disclosure Documents (FDDs), reviewing Internet comments and direct correspondence with former franchisees and BBI brand partners.  Still, they should be regarded as opinions and are provided so our readers can do their own investigations and draw their own conclusions.  If you agree, disagree or have different take on this subject, we invite you to leave a comment below, or send us an email.

Each time we post we notify David Rutkauskas and BBI and invite corrections, clarifications, statements or rebuttals.  So far, we have not received a reply.

ARE YOU FAMILIAR WITH THE BEAUTIFUL BRANDS INTERNATIONAL OR BBI FRANCHISE OPPORTUNITIES? 

PLEASE SHARE A COMMENT BELOW.

Contact UnhappyFranchisee.com

TAGS: Beautiful Brands, BBI, Beautiful Brands International, David Rutkauskas, FreshBerry, CherryBerry, Camille’s Sidewalk Cafe, Smallcakes Cupcakery, franchise scam, franchise fraud

19 thoughts on “BEAUTIFUL BRANDS INTERNATIONAL (BBI): Behind the Hype

  • January 16, 2013 at 5:37 pm
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    This guy needs to be stopped! Somebody please report him to the proper authorities!

  • January 28, 2013 at 5:46 pm
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    and so the BS continues…it looks like a freelance writer contacted this clown rutkaskas for an interview and he fed her some crap about how BBI is breaking sales records etc etc …here’s a link to the article

    http://journalrecord.com/2013/01/21/its-a-beautiful-brands-world-franchiser-crossing-borders-and-breaking-records-general-news/

    and here’s the writer’s twitter conversation with rutkaskas…he must have told her about all the records bbi are setting – so we see the same “type” of story again and again..what a scam!

    Heide Brandes‏@HeideWrite

    @davidrutkauskas thank you! I heart you!

    10:27 AM – 17 Jan 13 · Details

    17 Jan Heide Brandes‏@HeideWrite

    @davidrutkauskas ready when you are! Shouldn’t take more than 15 minutes.

    17 Jan Heide Brandes‏@HeideWrite

    Great interview with @davidrutkauskas – funny AND brilliant! #amwriting

    here’s her website…
    http://www.heidewrites.com

    and walahhhh the article gets picked up…….

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  • February 18, 2013 at 11:47 am
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    Can anyone describe the breakdown in the business model?

    I get nothing from their website.

    Why is CherryBerry failing?

    Is it product cost? Is the Franchisor Double Dipping?
    Labor Cost? Is it self-serve?
    Average Unit Sales? What are they?

    Jim Coen

  • February 20, 2013 at 1:22 am
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    Here’s the issue. You cannot support one unit markets spread all over the country with proprietary products. The cost of freight and distribution product slotting with slow movement does not support a profitable business model. It takes at least 5-6 locations to make a new market viable and that requires someone with infrastructure and a large amount of capital to do it.

    As “someone” once said, the way to the top is over the backs of other people and I don’t care if people fail, I can just sell the rights to someone else.

    The sad truth is the money is in selling franchises, not in royalties of successful locations. Royalties pay for ongoing support and franchise fees and development rights pay for a flamboyant lifestyle.

    A word to the wise, the model is not proven with one location and any franchisor who just has one location isnt sold on the model themselves.

  • February 20, 2013 at 8:16 am
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    Been there done that:

    You make several excellent points.

    David Rutkauskas just told Tulsa World he’s excited to be “now franchising” Rex’s Chicken.

    In July 2010, Fast Casual wrote about BBI’s Rex’s Chicken: “With only one store up and running, Rutkauskas plans to open more stores next year. His goal is to open between 1,200 and 1,500 total starting as early as December.”

    The first Rex’s Chicken outside the Tulsa market (where a former Rex’s Chicken had a cult following) in Raleigh appears to have closed about a year ago. If BBI isn’t confident enough to test, prove and refine the concept with even a single Rex’s Chicken company-owned store, should he be selling Rex’s Chicken franchises to others?

    This is a cautionary tale for would-be franchise owners. Make no mistake: Franchisors can still have million-dollar homes and $100K Mercedes even if most of their franchisees fail.

    David Rutkauskas

  • February 22, 2013 at 1:56 am
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    I worked there and know this company could have been a successful franchise. But. David wanted it to be a family business and none of them had the experience to take it to the next level from being a single restaurant to a restaurant franchise.

    All the family members have big titles, but none of them have the education or prior experience to warrant their title. Before Riverside location opened this was nothing more than a kiosk food stand under an escalator. If it wasn’t for a marketing person out of Dallas revamping their image and defining their niche toward soccer moms this concept would have closed along time ago.

    Camille’s was a pretty gift box with all the wrapping and big bow, but inside there was nothing there. People fell in love with the wrappings, but bought thinking the inside was just as nice, only to find it was an empty box.

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  • July 10, 2013 at 2:12 pm
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    I notice on the BBI website under portfolio it has the franchisee login page to the Camille’s company website listed as a company under it’s umbrella. (My Camille’s)

    How can a franchise website be considered a company? Just another example of stretching the truth. Guess that happened under a drunken binge.

    BBD

  • July 10, 2013 at 2:59 pm
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    BBD (Broke By David):

    Yes, counting MyCamille’s as if it were a separate brand when it appears to be the name of the intranet is just one of the many deceptions on that website, it seems to me. Right next to it is the CherryBerry logo – BBI hasn’t made a peep about CherryBerry and CB disavowed its relationship all the way back when the Franchise Times article was published.

    What about the listing of the worldwide offices in Riyadh, Istanbul, New Delhi, Toronto, etc.? Or the claim under the “franshise” map that there are 183 restaurants open, 47 under construction and 110 coming soon?

    The site looks abandoned… even David’s Twitter feed just spins and spins. The Freshberry site is still down, though the “non-payment” message has been removed.

  • July 11, 2013 at 11:08 am
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    BBD:

    We were both wrong. MyCamille’s is actually a David Rutkauskas franchise variation of Camille’s – scaled down version promoted on a bunch of classy franchise websites (with names like “Franchise Millionaire.”).

    They claim they are registered in “all United States and International” which is funny bc I can’t find US registrations and there’s no such thing as an “International registration”

    Here’s the description:

    “MyCamille’s is a hybrid fast-casual style café that is the next generation to the original Camille’s Sidewalk Café that has specialized in fresh delicious food in a warm and sunny atmosphere for over 17 years. Camille’s motto is Eat, Relax, Enjoy—and you can truly do that in the oasis-like environment.

    “MyCamille’s specializes in Salads, Wraps, Deli Sandwiches, Flatbread Pizza, Smoothies, Desserts and Coffee. MyCamille’s becomes “your” Camille’s in that you can choose from your choice of garden fresh greens, fresh fixings, meats and your favorite dressing all mixed before your eyes-your way-your style! Want your choice to be in a wrap, sandwich or pizza instead? No problem! Your way is our way!

    “Choose your own unbelievable signature Tuscan Tomato soup or one of our other tasty creations. Or come in for that perfect meal replacement smoothie made fresh of Strawberry, Bananas and Non Fat Yogurt. Delectable dessert choices consist of a variety of dessert bars, and cakes such as Carrot Cake, Chicago style Cheesecake, Raspberry cheesecake and many more.

    “MyCamille’s also does a wide range of catering services including boxed lunches and trays for office meetings, banquets and parties.

    “My Camille’s Franchise Opportunity

    “Established: 2012
    “States Registered In: All United States and International”

    Buyer beware!

  • July 11, 2013 at 1:37 pm
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    Buyer run as fast as you can……

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